Florida Cabinet Advances Insurance-Related Rule Repeals: Pre-Need Contracts, Premium Finance Compliance, Long-Term Care Policy Free-Looks, Mortgage Insurance Advertising
Aug 15, 2012
The Florida Cabinet met last week, during which it approved several insurance-related items. To access the complete August 7, 2012 agenda, click here.
During the meeting, Florida Insurance Commissioner Kevin McCarty presented the Florida Office of Insurance Regulation (“OIR”)’s agenda items, a copy of which can be viewed by clicking here.
He requested approval for publication of a Notice of Repeal to Rule 69O-148.001, entitled “Funding of Pre-Need Contracts with Life Insurance or Annuities,” which addresses the sale of life and annuity products by agents to fund pre-need funeral contracts. Currently, the Rule limits the amount of insurance that may be written to $7,500. This conflicts with Section 626.785, Florida Statutes, which permits coverage up to $12,500. The remainder of the Rule has essentially the same substantive content as the statute and has been deemed to be unnecessary. As a result, the OIR requested that this Rule be repealed.
Commissioner McCarty also requested approval for publication of a Notice of Repeal to Rule 69O-196.008, “Failure to Comply.” This Rule states that the failure of a premium finance company to comply with the requirements of Part XV, Chapter 627, F.S., or any of the Rules lawfully made pursuant thereto shall cause the premium finance company to be subject to action by the OIR under Sections 627.832 and 627.833, F.S. This Rule substantially restates the language of Sections 627.832 and 627.833, F.S. and has therefore been determined to be duplicative. Therefore, the OIR requested that this Rule be repealed.
Approval for publication of a Notice of Repeal to Rule 69O-157.018, “Right to Return Policy-Free Look” also was requested. This Rule requires individual long-term care insurers to give policyholders 30 days to examine a policy after its delivery and to return the policy for a full refund of premium if they are not satisfied with the policy for any reason. The Rule also requires insurers to provide policyholders with a notice of their right to return the policy within 30 days. Because it substantially restates the language of Section 627.9407(8), F.S., it has been deemed to be and is unnecessary and therefore proposed for repeal.
Rule 69O-185.005, “Advertisement of Mortgage Insurance” was also requested by Commissioner McCarty for approval for publication of a Notice of Repeal. This Rule prohibits insurers from insuring mortgages that are offered for sale to the public by advertisements that expressly or impliedly represent that the worth, value or safety of the mortgage investment arises by virtue of the proposed mortgage guaranty insurance, rather than by virtue of the value of the underlying security, or which stress the fact that the mortgage guaranty insurance is regulated by an agency of the state or federal government. This Rule substantially restates the language of Section 635.071(3), F.S. and is considered to be unnecessary. Therefore, it has been proposed for repeal.
Finally, Commissioner McCarty requested approval for publication of a Notice of Repeal to Rule 69O-157.105, “Refund of Premium,” which requires insurers that cancel an insurance policy to refund to the policyholder any unearned premium paid to the insurer. This Rule substantially restates the language of Section 627.6645(4), F.S. and has been determined to be unnecessary. Consequently, the OIR requested that this rule be repealed.
The Cabinet approved all of Commissioner McCarty’s requests.
Should you have any comments or questions, please contact Colodny Fass& Webb.
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